CERAWeek 2023: The Staying Power of American Natural Gas and Oil

Chris Carroll
Posted March 6, 2023

Strong statements about climate or energy policies tend to be seen as heroic or villainous, depending on the audience – and there’s not much in between. President Joe Biden’s State of the Union address last month is a case in point. In an unscripted line that actually approached energy reality, he said: “We’re going to need oil for at least another decade.” He then added “and beyond that,” no doubt a nod to audible laughter from some of the assembled members of Congress. But the president’s ad-lib pleased no one and only served to start a new battle in the war over the future of oil and natural gas. 

Some prefer to remove them from the energy picture entirely. The Green Party advocates for “complete freedom from fossil fuel dependency — to be achieved by 2030,” an odd plan considering oil and natural gas account for nearly 70 percent of the energy Americans now use. Others say a lack of investment in oil and natural gas products is the “road to hell for America,” as JPMorgan Chase CEO Jamie Dimon put it. 

With such a wide range of viewpoints, the dawning of CERAWeek, a major energy conference in Houston, is a good time to step back, consider the facts, and make a plan that ensures a strong future. 

Opening CERAWeek this morning, Chevron CEO Mike Wirth set the stage, asserting that the world is on a path characterized by a lot more people, a lot more energy demand and a lot more action on the climate front.

.@Chevron CEO Mike Wirth on future #energy and #climate challenges: “This industry does ‘difficult’ every day. … The solutions will come from innovation, technology, ingenuity. There’s never been a more exciting time to do that than today.” #CERAWeek pic.twitter.com/kA1tn3rE5E

— American Petroleum Institute (@APIenergy) March 6, 2023

“This is an industry that solves the toughest challenges,” Wirth said. “This industry does ‘difficult’ every day. The solutions will come from innovation, technology [and] ingenuity.” 

The world will need all three. The United Nations estimates the population will rise by 1.7 billion people by 2050, and the U.S. Energy Information Administration (EIA) projects a nearly 50% increase in global energy use by 2050. Alongside energy demand from the growing population, there are also 754 million people worldwide without access to electricity. Those countries want to get on the grid. 

Taken together, it’s a tall task, but one Wirth believes is achievable. 

So how will the world supply all this new energy? 

American oil and natural gas must be part of the discussion, business and energy experts said today. 

“If we do it right – and we are headed down the path to do it right – then our industry will be around for 60, 70, 80 years,” Occidental President and CEO Vicki Hollub said. “People that are in the petroleum industry or thinking about a career today – we’re in the most exciting time for our industry in a long time.”

An audience member at #CERAWeek asked @WeAreOxy President and CEO Vicki Hollub what she would tell young people considering a career in the #oil and natural #gas industry. She calls it a great sector for those looking for a big challenge — and looking to win. pic.twitter.com/0gk7YQEkwW

— American Petroleum Institute (@APIenergy) March 6, 2023

A bit more big-picture context: The current energy mix is made up of oil, natural gas, coal, nuclear and renewable sources, with oil and natural gas supplying 56% of global energy. Renewable sources are expected to increase from around 12% in 2021 to over a quarter of global energy supply in 2050. Across the board, EIA expects to see an increase in the production of all forms of energy over the next two decades. 

“It takes an ecosystem, and it takes that ecosystem of the different stakeholders to be aligned,” Baker Hughes CEO Lorenzo Simonelli said. “ … It requires willing operators. Then it requires the right policies to be in place. Then it requires the right incentives to be in place. We’ve got to make sure we look at that total ecosystem to actually find the solutions.”

.@BakerHughesCO CEO Lorenzo Simonelli urges alignment between industry and government in supplying #energy and fuels as well as reducing emissions. Calls for sensible policies that take into account “the marathon” of future energy and #climate policy. (1/2) pic.twitter.com/qjHDORTWmb

— American Petroleum Institute (@APIenergy) March 6, 2023

With a clear picture of the world’s energy future, it is important America solidifies its role in it. Energy security will continue to grow as a global concern. Russia’s invasion of Ukraine reminded the world of the serious consequences when nations depend on adversaries for critical resources. It also reminded everyone of the vital role American energy – especially liquefied natural gas (LNG) – plays in supporting our allies abroad. President Biden recognized this when he promised more LNG to Europe last spring. 

Gunvor CEO Torbjörn Törnqvist put it in stark terms on the conference’s first day: "The world will not be able to live without U.S. LNG." 

Still, for America to maintain its status as a global energy leader, we need to ensure a welcoming environment for energy production. This requires policies to support oil and natural gas development, streamline the process for energy infrastructure, and encourage innovation in lower-carbon technologies. 

Washington knows where to begin. For starters, the Interior Department should finalize a five-year program for offshore oil and natural gas leasing. The department is currently eight months behind on this legally mandated obligation. And Congress should pass permitting reforms to clear the way for new energy infrastructure projects – of all kinds – that are stuck behind a wall of red tape. 

“It’s time to get back to work and pass permitting reform legislation,” top White House climate advisor John Podesta said during a lunchtime CERAWeek keynote, mentioning pipelines as part of that work. He added that carbon capture, utilization and storage; direct air capture; hydrogen; and other breakthroughs are how representatives from assembled oil and gas companies are making a difference.

In a keynote speech at @CERAWeek, White House climate advisor @JohnPodesta says #PermittingReform is a priority for the administration & urges Congress to act to pass legislation to better move energy from where it’s produced to where it’s needed. We agree.https://t.co/GPqlKABn7B

— American Petroleum Institute (@APIenergy) March 6, 2023

We are happy to hear the president and his team recognize the importance of our industry’s projects for global energy security, now and deep in the future. The facts are clear: The world will need U.S. oil and natural gas through 2050 – and beyond that.